Insurance as investment 101


Many of you might be thinking, why do we even talk about insurance in the investment channel.  We say the investment is for thriving when the economy is doing good, and insurance is for surviving during a bad economy. We can say insurance is a well-being fee.  Well, it’s the fee that means we should not commit more than we could offer. For every asset class, there will be corresponding insurance. If we think assets are objects, then insurance is the shadows of an object. When the object gets destroyed, shadows manifest into equivalent value assets. It may not be identical to a real thing.

This Story is from Indian mythology, and it happened that the Sun god wife Sangya was constantly disappointed with the expectation set by the Sun god Surya. She is not able to perform all the activities set out by the god. She wanted to attain greatness by meditation to get the power to meet the Sun god’s expectations. She seeks advice from her Father, Vishwakarma, regarding this matter. Her father advised her not to go for meditation because there will be no one to take care of her kids. However, She decides to clone herself with a magical chemical from her father’s lab.  Clone of Sangya called Chayya, Sangya ensures that Chayya takes care of her kids and performs all the activities set out by Sun god.  And Sun god un-aware of this matter, he was pleased with Chayya because she performed all the activities and also taken care of kids. He blesses Chayya with the kid.  When Sangya comes back to the kingdom, the Sun god will come to know about this matter and advices Sangya not to undo her clone. Now part of responsibility and value has been taken away from Sangya and given to Chayya.  So moral of the Story is don’t overdo anything beyond your limits. Since it is an investment, we say we should know what our financial limitations are.

As we told, there should be insurance for every asset class; let us see some of the insurance in the market and how we can use it for our well being

  • Life term insurance
  • Endowment insurance
  • Health insurance
  • Title insurance
  • Vehicle insurance
  • Transport insurance

Insurance is a powerful tool that protects your wealth during a crisis and helps us recover back to normalcy. However, it comes with a price tag too.  

Does it depend on each person as to how much they have to cover their assets in insurance? The answer is simple higher the asset value, the higher the insurance fee.

So we are not discouraging or suggesting that we should have lesser assets. No, that is not what we mean. If we aquiver the things that are more than our needs, the chance of getting into financial overhead is more.

Let me explain to you, for example, if Jone is earning 1000$ every month, And if he made a profit in the stock market trading worth 10,000 $, Jone decided to buy a car worth 40,000$, thinking he could make some more profits in trading like that. Now he has 30,000 as a loan, and he has to pay insurance of 1000$ every year. And EMI comes to 500$ every month for subsequent years. Jone beat again in the stock market, but he did not profit this time, but he lost 2000$. I think you already got what I am saying right. To cover the loss, he goes for a loan top up. After one year, due to high stress, he decided to sell off his car for 35000$. Well, it was not a good choice to buy things which are more than our needs.  Well, the insurance fee is just overhead if it is a wrong investment.

We are not even saying insurance is terrible. Insurance is essential for the things we care about the most. Like our health, parents’ health, protecting our kid’s future, and if we are the sole breadwinner than insuring our life just in case of unfortunate happens, it should not impact our family members.

In all the case insurance tries to protect insuree from the financial crisis. However, insurance will come with many preconditions based on the premium amount.  Some time would be better to go for comprehensive coverage. For example, if we go for standard health insurance, health insurance may not cover all diseases. What’s is the point of having health insurance.  Well, I have more examples if Joy has a personal loan worth 50000 and joy is the sole breadwinner in the family. Joy avoids buying term insurance. Well, it is a wrong choice. What if Joy kicks the bucket due to some unfortunate fact, and then family has to bear the personal loan. A good investor always focuses on wealth creation and wealth protection while keeping their famillies risk-free.

Many insurance companies offer insurance come returns on investment plans which may link with the stock market. We call it ULIP. Even though this kind of insurance looks very attractive, is it worth buying this kind of insurance? The answer is yes and no if you have minimal knowledge of investing your money and managing it. Then ULIP is for you. However, if you know how to invest your money? You can earn much better returns by investing and managing your money by yourself. For those who are not good at investment, some money in this kind of insurance may make sense. However, if you want to grow your money, you should learn how to invest your money better. Here at, we are committed to providing the best investment content. So make sure you follow our social media so that you can make informed decisions on your investment.

If you are an employee, then most probably, health and life insurance will be given by your company. However, if you constantly keep changing your job, it is better to own your insurance by yourself. Also, make sure your insurance covers you, your family, and your dependents. For self and business people, it makes sense to have insurance owned privately. In some countries, the government would provide health and life insurance. Would you please check your country’s public website on this? Also, it will significantly help if you can leave the URL in the comments section. It would help the reader.

If you ask us what a reasonable premium we should pay for our insurance is, we recommend 1% of your annual income. However, it is not always possible to achieve this. We end up paying more than we think. It would be best if you took our advice with a pinch of salt. And do your due diligence before taking any insurance. The easy part is buying insurance, but the hard part is claiming the insurance when it gets mature because either nominee would have been unaware of the insurance. Or companies take time to check the well-being of their clients. Like many wise companies would a good deal of profits by unclaimed money. So we took a small initiative towards this issue. We create the tool which helps inform you and the nominee regarding your insurance. If you are interested, please check it out here.   

Or click on tools to find insurance reminder.

Real Estate as Investment 101


Often we connect with piece of land or property with good deal of emotion attached to it because, it might be the place where we had spent our childhood with our grandparents, or It can be your first home you bought from your salary and so on.

Before we take real estate as investment vehicle make sure, you are not attached emotionally with property and make a clear exit plan, just  in case it if is not working out for you.

Note please do not think the home which you live is an investment unless you have bought it yourself for investment purpose. Due to obvious reasons.

 And by the way buying house, it can be sometimes liability then investment in short term. with that controversial statement, lets unpack real estate

There are different segments of real estate investment, it can be

  • Residential properties it includes, single family or multifamily properties, or gated community apartment or it can be beautiful out skirts villa where you get away from day today Hussle and bustle.
  • Commercial properties like shops, malls , office space, hotels and so on
  • Industrial properties this are mostly used by business for building their factories or warehouse.
  • Agricultural lands can be classified into wet land, semi wet land, or dry lands. Based on water availability and irrigations facility. If you are have forming family background, or studying related to agriculture. This might be good option for you to invest both your time and money.
  • If you have big pocket even you can think buying small highlands but make sure, you take your food along with you because most of highlands  are not having any habitat, and also don’t forget your return ticket.
  • If you think that all there to cover in real estate then, think again. There whole new opportunity opening in real estate market, Yes. That is inter planet residence. It is not far away where people are living in Moon and mars. We can see this happening, in our generation itself, by the end of this century people living in Moon and Mars will be traveling between the planets for visiting their families, or going out of earth for their business trips. Already many company like space X, amazon, etc. or thinking these as possibilities.

Now we know where we can invest our money in real estate.

Let us understand how can we make money from real estate?

 Money can be made in two ways, one by renting out your property and 2nd by waiting for property to get appreciated.

Of course there is another part to it , you can earn some money by brokerage by referring people to right property,  that we are not covering in our channel.

Sad part of most investment is you can only make money when you sell it, but there is exception to it. in real estate sector has huge rental market, where you can rent your property or lease it, without selling out your property.

Rental properties are profitable when you buy the property without any loan.  Or if you buy by paying 60% to 70% of down payment from your savings. We are not saying if you are buying property by mortgage or loan is bad, But you cannot make profit quickly. Of course, you can make profit but return on investment will be too long. But it all depends when your mortgage or loan gets closed.

Do not get disappointed with our answer, what if we say there is alternative way.

You can make profit in less time, If you buy property with right ratio of mortgage interest rate, down payment and earn right rent per unit of property.

We do not want our introduction on real estate video to get too long, So we will make it separate video on this topic for you to watch it. Make sure you have subscribed to our channel, so that you can watch when it is done.

That is out of the way. Let us focus on when our property get appreciated?

Of course, you know the answer when there is demand.

Demand for property can go high or low based on some of the factors like

  • Near by government project or IT corridors. can boost the real estate price to go high.
  • Job market is biggest driver for increase in real estate value, as more people needs to be sheltered  and hence increase the rental value and also value for property for purchase.
  • And also tourism is another biggest factor why property value goes high, as tourism enables small business like hotels, restaurants, handlooms business, etc. to thrive. This also creates demand for more commercial  properties and residential properties.
  • Increase industrial activity can increase value for industrial properties, agricultural lands as there will be high demand for raw material,etc.
  • Good road, rail and air connectivity can benefit all segments of real estate, you can witness this in western countries .
  • Overall real estate will grow when economy is doing good.
  • You can see some or all the aspects in metro cities across the world and hence  property values in metro cities are very high.

Don’t worry if you have not invested in any of metro cities here is some good news.

Because of COVID 19 many major companies are allowing their work force to work from home. Many of employees can now think moving back to their home town in tier 2 and tier 3 cities. This will boost macro economy outside the metro cities.  And property demand may go high in tier 2 and tier 3 cities. It again depends on future demographics.

From long term perspective  if we see, real estate has given constantly high returns.

For all speculators it is better to wait and watch, what holds for commercial properties in future?  COVID 19 has turned tables for all office spaces segment, As many IT companies and financial firm has started providing their employees to work from home.

We are making more video related to real estate in our near future. Featuring how small changes in property can increase property value, we will also see how to find right value for the property and so on. Buying property involves lot of paperwork and goes through various government offices and fees. We get into those things in our upcoming video on real estate.